Archive for August, 2008

KORONADAL CITY, South Cotabato — The spokesman of the Reformed Ilaga Movement said Saturday it was a defensive organization and was rejecting a taunt from the Moro Islamic Liberation Front for the vigilantes to try and attack rebel strongholds in Mindanao.

“We heard the MILF challenging us to attack their areas but we will not do that because once we do, they will bring the fighting to Muslim communities and we will be held responsible for that,” Mike Santiago, the group’s spokesperson, said by phone.

Santiago clarified that their role is only that of village defenders and assaulting the MILF or any Muslim community was never on their agenda.

“Our group has been known as liberator and peace advocate. Once we carry out attacks against the MILF, we will cease to be liberators already and become oppressors,” he said.

Besides, Santiago said that some Moro people have supported their cause.

“We have law-abiding Muslim supporters and they tag the MILF’s handiworks as un-Islamic,” Santiago said.

The Ilaga, composed mostly of Christians, was notorious in the early 1970s for vicious attacks on Muslim,s who themselves had armed groups known as “Black Shirts” and “Barracuda” in Central Mindanao.

In announcing the revival of the Ilaga in North Cotabato last Wednesday, Santiago said the group had warned the MILF to stop attacks on civilian communities and that it would kill 10 Moro rebels for every civilian killed if new attacks on unarmed communities were carried out.

Asked about incumbent and former public officials openly discouraging them from reviving the group, Santiago said they were not beholden to politicians.

“We don’t want to be influenced by certain (politicians). Our support mainly comes from the people…whether wealthy or poor. It would be difficult on our part if we have politician supporters,” he said.

How Zombie Debt Works

Introduction to How Zombie Debt Works

Nine years ago, someone stole your wallet right out of your coat pocket. You never even saw the guy. He used your credit cards to buy $1,300 worth of shoes. Of course you reported the theft as soon as you found out, and the credit card company declared you not responsible for the debt. Lesson learned, end of story. Right?

Today, you have a nice sturdy paycheck and a sound credit rating. In fact, you’ve got your eye on a gorgeous loft-condo. Suddenly the phone rings …

That old theft has come back to haunt you. The collection agency says that, with interest, the debt on that $1,300 now comes to more than $10,000. The agency has no record of your fraud report and considers you responsible for the debt. The agent informs you that if you don’t pay up — and soon — you could risk legal action. And the debt could jeopardize your loan application for that condo.

Surprise: You’ve just come face to face with zombie debt.

The Debt Lives!

Unfortunately, the zombie metaphor is incredibly apt. On the credit market, debts are sold and resold from agency to agency, so something you may have settled — even more than once — can spring back to life, with no record of past payments. Collectors grab for whatever they can ­get. And the debts are hard to kill.

Frederic J. Brown/AFP/Getty ImagesZombie debt has become profitable in part because of two trends that took off in the 1990s: the proliferation of consumer credit and identity theft.

Zom­bie debt gets its name because the debts in question are supposed to be dead and buried since:

You know the guy in the B movie who seals his own doom by panicking and getting himself cornered by the relentless zombie army? Zombie debt collectors expect you to be that guy. They make their profits from consumers who don’t know their rights, don’t know how to protect themselves, and panic.

To learn how not to be that guy, and how zombie debt has become such a hot topic, read on.

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Growth in the Collection of Zombie Debt

To understand why zombie debt is big business, you need to know a bit about debts, debt collection and consumer credit.

Let’s say that in 1994 Jane, fresh out of college and awash in debt, defaulted on a credit card. In 1996, she entered bankruptcy. Since then, she’s painstakingly rebuilt her credit, paying her bills on time and checking her credit report at least once a year. Because more than seven years have elapsed, the old default and the bankruptcy proceedings no longer even appear on her credit reports.

But what happened to that default? The credit card company wrote it off as bad debt — that is, the company took the debt as a loss. You’d think it might stop there, but you’d be wrong.

When a company writes off a debt, it often sells the debt to a collector. Depending on the age of the debt, the collector might pay as much as 12 cents for every dollar owed, or as little as a fraction of a penny [source: Weston]. What’s the point of this transaction? It enables the company selling the debt not to take a total loss. If Jane defaulted on a $100 debt, selling the debt at 12 cents per dollar lets the company turn it into an $88 loss, thereby recovering $12.

But what does the collector have to gain? The collector is betting that it can succeed where the old company failed. Paradoxically, they’re more likely to go after Jane because she has rebuilt her credit. They think she’s more likely to pay, because she doesn’t want to ruin her credit again. And often, they’re correct. These companies turn giant profits because their practices often succeed in wringing dollars out of individual consumers.

If the collector convinces Jane to pay that $100, the collector has just made $88. In the first few years of this decade, these profits exploded — to the tune of $110 billion in 2006 alone [source: Weston].

Zombie debt has become profitable in part because of two trends that took off in the 1990s: consumer credit and identity theft. Credit companies realized they could make more money in interest payments by extending higher-interest lines of credit to consumers who carried debt from month to month — the people most likely to default. The buying and selling of debts became big business. And identity theft created giant backlogs of bad debts for collectors to pursue.

Who Profits from Zombie Debt?

The collection agencies seem to be doing pretty well:

Asset Acceptance Capita’s revenues quadrupled between 2001 and 2005.

Encore Capital Group’s revenues went from $47.8 million (2001) to $221.8 million (2005).

NCO Financial Systems had revenues of $936 million in the first three quarters of 2007, despite federal actions against the company [source: Dalton].

The credit card companies fare better when they sell old debts, because the immediate influx of cash increases their quarterly earnings [source: Dalton]. And people who have invested in these companies do well when the companies post higher earnings, because the stock prices usually go up.

Kent Anderson, an attorney specializing in consumer debt, notes that collectors “often take the position that it is lawful to remind the debtor it remains a moral responsibility to pay the debt” [source: Anderson]. Getting a lecture on morals from a collection agency may seem a bit rich, but don’t be too quick to laugh it off. In 2005, the debt collection industry was the single biggest source of consumer complaints to the Federal Trade Commission.

What would you do if a debt collector resurrected some old amounts? Find out how to protect yourself on the next page.

How to Deal With Zombie Debt Collectors

Some of the worst problems with zombie debt arise when the debt appears just as a consumer is making a major purchase, such as a house or a car. Confused about their rights or simply anxious about obtaining their new loan, many consumers pay old debts to settle the issue quickly. And some people fall victim to a one-two punch of identity theft and their own poor record keeping: They wind up paying debts that weren’t even theirs in the first place.

Getty ImagesLiving economically after transferring her $10,000 debt to a zero-percent interest credit card, Danielle Rhoades was able to pay off her debt in a year.

Don’t acknowledge that the debt is yours, or even that you recognize it.

Get things in writing. Ask for information about where the debt originated — when, from whom, for how much. Check that information against your credit report and your other records.

If you don’t owe the debt, send the collection agency a written demand to stop contacting you. Send it certified mail, with a return receipt, and send it within 30 days.

Get a discharge order. Have you filed for bankruptcy since then? If so, your discharge order should protect you from attempts to collect this debt.

Determine the age of the debt. After six or seven years, you have certain protections under federal law.

Know your states statute of limitations. In some states, you may actually injure your credit rating further by making a payment on the debt. You might reopen the debt’s statute of limitations. And the collector, having succeeded in obtaining some money, might try to pursue the rest. Though no one condones defaulting on your obligations, some consumer advocates say that in this situation, your best option is to ignore the zombie debt collector. Even if you don’t dispute the debt, no court may consider your silence “an admission of liability” [source: Federal Trade Commission].

Be smart about your finances. Don’t wait for a problem to arise. Pay your bills on time, and check your credit score routinely. If you’re planning a major purchase, be familiar with your credit report well in advance.

MANILA, Philippines — Working while retired has increasingly become an acceptable option for many Filipinos. Recent surveys have shown many of our countrymen are not financially ready to retire or do not have a clear retirement plan.And even if their retirement plan is on track, it doesn’t mean sticking to just playing golf or going on cruises for the next decade or two.

Here are some options to consider when opting to work during retirement:

Stay the course. If you own your own business or have a professional practice, you can continue working as long as you like. If you particularly love what you do, there’s no point in stopping. You may reduce your work hours in deference to your health, but there is no reason why you should stop working altogether.

If you’re employed, mandatory retirement will require you to quit your job. If you’re a C-level executive, you could accept an offer to join the board of directors. If you’re a regular employee, you could ask your employer for a part-time job, preferably one with a more flexible schedule. Certainly, you bring decades of experience that’s not easily replaceable.

Switch to a new career. Some employees are able to get retirement pay after serving, say, some 10 continuous years in one company. One option is to do something totally different.

It could be the same job but in a different industry, say an HR job from a bank to a call center. Or it could be a different job with the same skill set, e.g., from being a project manager to being a TV producer.

If you’ve hated your old job before retirement, you could take on something that you’ve wanted to do all your life, like switching from being a dentist to a yoga teacher.

Start your own business. This is a popular “answer” for many who are asked what they plan to do after retiring from their jobs. Some buy a franchise and others start from scratch. This is a good route if you really think you can succeed as an entrepreneur.

It’s best if you put up a business related to what you have been doing. If you’re an advertising executive, you could put up your own agency. If you’re a top-notch programmer, you could set up your own software development company.

However, you might end up frustrated since running a start-up business on your own is entirely different from running a department – or even someone else’s company. So before you plunge into this, do your business plan very carefully. Maybe, you’re not really meant for business.

Consult for others. Another logical and popular next-stage career move for retirees is to go into consulting, either for your previous employer or as an independent consultant. It’s similar to starting a related business except you help other companies and organizations with their problems, not create your own by putting up a company.

There’s a lot of flexibility with consulting and it might even pay more than what you used to make as an employee.

Teach others. If you’re already set for life when you retire, perhaps you don’t need the headache of running a business or starting a consulting practice. If you want to give back to your community by helping other people and sharing what you know, consider teaching part- or full-time.

The younger generation could greatly benefit from your real-world expertise. The stress level isn’t high, even if the pay wouldn’t as great. But then again, it shouldn’t matter if money isn’t a factor.

Transform a hobby. Often, we have dream jobs we never seriously pursued because they just wouldn’t pay the bills. Perhaps you love scuba diving. Or the samba. Or tinkering with cars. Whatever passion you’ve relegated as a hobbies or pastime while grinding at your previous daily job, now is the time to go for it — and earn in the process. You may not receive big bucks, but with a financial cushion, who cares?

Travel while earning. You read that right. Traveling is often an integral part of enjoying retirement. But why not make a little money while at it? Being a travel writer or photographer is an excellent way of seeing the world — and getting paid (or at least having all your travel expenses paid).

If you don’t have writing or photography skills, there are other things you could do. Try being a tour guide if you’re amiable and interested in cultures. You can even join a cruise ship as an entertainer, nanny, or program host.

Volunteer. A retirement career need not always involve pecuniary compensation. You can devote the rest of your life supporting and volunteering for causes you believe in. Certainly, your experience in the private sector will go a long way in fund raising or promotional events. Non-profit organizations also pay full-time staff and consultants, so you may opt to do this on a full-time basis.

Watching That Balance Grow . . . and Grow

It’s a tried-and-true piece of financial advice: try not to make too many purchases on credit. If you heedlessly let your balance build, you give yourself permission to live beyond your means and incur interest fees in the process.

Apparently, this is becoming harder advice to follow. According to a new report from the Federal Reserve, revolving credit, which includes credit cards, increased at an annual rate of about 7 percent in May. In April, by contrast, it had shown a slight percentage decline.

The increase is notable because May was the first month when rebate checks from the federal government really started to kick in. So even with some extra financial padding, many consumers still turned to their credit cards.

Prudent credit-card carriers may well be vowing to pay off their balances in full. But with food and gas prices soaring, more people must lean on plastic for the necessities of life, and it becomes harder and harder to keep that balance from ballooning.

Retire Now, and Risk Falling Short on Your Nest Egg

If you have just retired or are about to retire, your timing could not be worse.

Leaving the work force just as markets stumble can do real damage to retirement savings. Your nest egg has shrunk just as you need to start withdrawing money from it; you are essentially locking in your losses. (And at the moment, sinking home values make matters even worse.)

Of course, if you have managed to put away much more than you will ever be able to spend, you can stop reading now. This article is for everybody else — those who thought they had saved just enough but now fear their retirement funds will not last.

If the market plunges while you are still early in your career, you have plenty of time to make up for it. In fact, market declines work in your favor while you are still on the payroll; they allow you to buy more stock or mutual fund shares cheaply. But should the market plummet the day after your retirement party, or even in the first years after, the risk that you will outlive your savings increases sharply.

“Any money that retirees take out of their portfolios or that they lose in market declines in the first five years of retirement has a higher cost because it’s money that won’t be invested to earn returns in succeeding years when the markets recover,” James Tzitzouris Jr., an investment analyst on T. Rowe Price’s asset allocation team, said in a study. “And the less they have invested after a bear market, the less potential they have to benefit from the compounding of any earnings in subsequent years.”

Right now, we are dipping in and out of bear territory. That is why it is crucial, especially if you are on the cusp of retirement or recently retired, to look closely at how your portfolio is invested. You should make sure your money is divided across different slices of the stock and bond markets. You also need to be sure your allocation is one your stomach is strong enough to handle.

The conventional wisdom is: ride with the ups and downs in the market and all will work out in the end. But retirement is the proverbial end.

Look at it this way. Since Nov. 28, 1980, there have been five bear markets, if we count the current downturn. Yet the market has managed to return an average of 8.62 percent to investors annually, as measured by the Standard & Poor’s 500-stock index as of Aug. 1. If you include dividends, the S.& P. 500 has yielded an 11.38 percent return on an annualized basis.

But financial markets do not travel in straight lines. If you happen to retire when those lines are pointing downward, you may have to make some sacrifices. And yes, that may involve working longer or spending less.

“It’s all about trade-offs,” said Christine Fahlund, senior financial planner at T. Rowe Price. “There is no perfect solution.”

Take a 65-year-old investor who retires with a $500,000 portfolio, with 55 percent invested in stocks and 45 percent in bonds. She withdraws 4 percent of her portfolio (or $20,000) in the first year and increases the amount she withdraws by 3 percent each year to keep pace with inflation ($20,600 in the second year, $21,218 in the third year, and so on).

If she follows this schedule, she has an 89 percent chance of having enough money to sustain her for 30 years, according to a T. Rowe Price analysis involving 10,000 simulated market situations.

But a bear market could throw everything off. The picture becomes rather grim if the portfolio earns 5 percent or less on an annualized basis in the first five years after retirement and the investor continues to make the same withdrawals. Suddenly, that 89 percent chance of having enough money shrinks to as low as 43 percent for the remaining 25 years of retirement, according to T. Rowe Price.

Fortunately, you can soften the blows of retiring in a slumping market. Here are some ways to help make sure your savings last as long as you do:

WORK LONGER AND SPEND LESS This may sound obvious, and somewhat depressing, but working just a few years longer can make a big difference.

Besides, it does not have to be entirely unpleasant. Maybe you could continue to work a bit longer but start taking the trips you planned for retirement: say, keep your job, but go to Maui. Or perhaps you could work part time and earn enough to cover the amount you would have drawn from your retirement portfolio. At least you are not dipping into your savings while they are down.

Thomas S. Rogers, a certified financial planner and co-owner of the Portland Financial Planning Group in Portland, Me., said he had one client who had planned to retire in July, just as the S.& P. 500 index entered bear territory. Mr. Rogers said he determined that his client, with $1.4 million in savings, could afford to retire. But the client was having trouble selling his condominium and decided to work a bit longer.

“Psychologically, people find it hard to retire when the market is down 20 percent,” Mr. Rogers said.

EASE UP ON WITHDRAWALS One of the most practical alternatives, planners say, is to skip the annual adjustments for inflation and keep the withdrawal amounts steady. “That’s a self-imposed discipline that retirees would be wise to adhere to,” said Ian Weinberg, a certified financial planner in Woodbury, N.Y.

To get a better idea of how much you can afford to withdraw, you can test different amounts with a retirement income calculator on the Web, like T. Rowe Price’s.

FIND YOUR RISK TOLERANCE If the latest market dive tempted you to make major changes to your portfolio, it is time for a gut check. This goes for everyone, whether you’re on the cusp of retirement or you already consider golf your full-time occupation.

“You want to figure out what is the right portfolio mix for you and to also understand, or have a realistic sense, of how bumpy the risk is likely to be,” said Hersh Shefrin, a professor of behavioral finance at Santa Clara University in California. It may make sense, for instance, to reduce the stock portion of your portfolio and possibly invest more in bonds or cash.

Just remember that you can also invest too conservatively. Putting all your money into bonds is not a good idea, either, as stock returns will help the portfolio keep pace with inflation. A reputable adviser can help strike the right balance.

DIVERSIFY At this stage in your life, you should already have a diversified portfolio. It is one of the most important factors in generating more consistent returns and cushioning against sharp declines.

It is hard to generalize what stock-bond-cash split new retirees should have because it depends on their age, tolerance for risk and other individual factors. But investors also need to diversify carefully within those major asset classes.

“It’s not sufficient to say that ‘I’m well diversified because I’m 60-30-10 in stocks, bonds and cash,’” said John Nersesian, managing director for wealth management services at Nuveen Investments. He said that within stock funds, for instance, that money should be divided among “large cap and small cap, growth and value, domestic and international.”

And naturally, as retirement approaches, your mix of investments should gradually become more conservative. You should review your long-term asset allocation plan every 12 to 24 months, mainly to see whether you misjudged your risk tolerance or whether you need money for unforeseen circumstances, said Holly Isdale, head of the wealth advisory group at Lehman Brothers.

Some investors would rather leave this to professionals, whether a financial planner or a target-date retirement fund, whose investment mix gradually becomes more conservative as the retirement date nears. The strategies and fees of target-date funds vary from company to company, so be sure to do a side-by-side comparison.

REBALANCE When markets are volatile, your original asset allocation may be thrown off kilter. Investors should rebalance their portfolios once a year. That means selling positions that have done well and putting that money into areas that have fallen out of favor.

“Rebalancing forces us to do what is emotionally uncomfortable, but financially productive,” Mr. Nersesian of Nuveen said. “The natural thing to do is to add to areas that are doing really well,” when we should be doing the opposite.

“That will ultimately lead to a more consistent return,” he said, “which is the key to a more successful retirement experience.”

Fat Cells in Obese People Are ‘Sick’

WEDNESDAY, Aug. 27 (HealthDay News) — Fat cells in obese people are “sick” compared to those in lean people, a new study shows.

Published in the September issue of Diabetes, a group of researchers from the Temple University School of Medicine analyzed fat samples from the upper thighs of six lean and six obese people.

They found significant differences in the fat cells of the obese participants compared with the lean participants.

“The fat cells we found in our obese patients were deficient in several areas,” study author Guenther Boden, the Laura H. Carnell Professor of Medicine and chief of endocrinology, said in Temple press release.

Boden said that the obese people’s fat cells showed stress on the endoplasmic reticulum (ER), which helps cells synthesize proteins and monitor how they are folded. When the ER is stressed, Boden explained, it produces several proteins that ultimately lead to insulin resistance. Insulin resistance, in turn, plays a major role in the development of obesity-related conditions.

The differences in the fat cells between obese and lean people may help explain the link between obesity and a higher risk of diabetes, heart disease, and stroke, Boden theorized.

More information

The National Heart, Lung, and Blood Institute has more about overweight and obesity.

You just went away for the weekend and you came back to find that you gained 5 pounds over the course of 3 days. In your disbelief, you quickly curse the Weight Gods for being so cruel. Sound familiar? This was me last weekend. A little jaunt to Montreal, eating at decadent cafes, packed it on quick. This inspired me to discuss the seemingly unbalanced equation of weight gain vs. weight loss, the facts that surround the issue and how losing the 5 pounds feels so much harder than gaining them:

FACT 1 – It is Simple Math: To maintain your ideal weight, you need to eat as many calories as you burn in one day. The balanced equation looks like this:

If what you eat equals more than what your body uses, you will gain weight. In the situation of a vacation, it is likely that you eat more unhealthy food than normal and possibly get less exercise, resulting in an imbalanced equation, with a higher number of calories on the eaten side than on the burned side. That imbalance over the course of a few days can easily represent a few pounds. (To assess an approximate of how many calories you need.)

FACT 2 – A Pound is a Pound is a Pound: One pound of body mass represents 3,500 calories. Regardless, if you are trying to lose a pound or gain a pound, the pound will always represent 3,500 calories. So, if you eat 3,500 calories more than your body requires, you will gain 1 pound. Similarly, if you eat 3,500 calories less than your body requires, you will lose 1 pound.

FACT 3 – Exercise is Weight Discriminating: Whether you are 120 pounds or 175 pounds, you will gain one pound from eating 3,500 calories more than you need. Unfortunately, this doesn’t hold true for burning calories. How much you weigh actually dictates how many calories you burn per hour. The more you weigh, the more you burn, and as a result, the easier it is to lose the pound…sound crazy? It is true.

FACT 4 – Aging Contributes to Weight Gain: As if aging doesn’t contribute enough to unfavorable things, it also contributes to weight gain. As we get older, our metabolism slows down, requiring us to need less food and calories. If you don’t modify your caloric intake as you get older to reflect this change in metabolism, you will start to see weight gain.

The Bad News: Unfortunately, eating an extra couple of unhealthy snacks or drinking a few extra glasses of wine can happen in a blink of an eye. However, the time and energy required to burn off those calories takes a lot more effort. We have provided a chart on what 1,000 calories looks like on both sides in the chart below (remember, it is 3,500 calories that make up a pound).

The Good News: Whether it is rapid or slow weight gain that you have experienced, losing the extra weight can be tackled through two avenues (and should be): calorie reduction and exercise . Choosing to lose weight through both calorie reduction and exercise will accelerate the process. If for seven days you burn 200 extra calories through exercise and reduce your food intake by 300 calories each day, you will lose that extra pound. Further, it is a lot easier than trying to either reduce your caloric intake by 3,500 calories (which is physically impossible) or burning an extra 3,500 calories during exercise (which takes a ridiculous amount of time and energy).

What you Can Do: Assess whether your weight gain was a rapid gain due to atypical behavior (E.g., vacationing) or a longer-term gain. If it was a rapid gain, there is a good chance you will lose the weight by returning to your normal habits. You might have to be a little strict for a day or two, but you shouldn’t feel like a major overhaul is in order. If, however, you have gained the weight over a period of time, assess your habits and think about what has changed in your life. Have you stopped exercising? Have you let your eating habits go? Have you hit a milestone birthday? Once you can assess the reality of your situation, remember the equation: to maintain balance, burn the calories you eat.

MANILA, Philippines—The government was hard-pressed to defend its position that a provisional agreement on ancestral domain with the secessionist Moro Islamic Liberation (MILF) Front had no binding effect so it had no case to answer before the Supreme Court.

During arguments on the second day of hearings on the petitions against the proposed Memorandum of Agreement (MOA) on ancestral domain, Solicitor General Agnes Devanadera found herself on the dock as various high court justices warned of the dangers in international law that the government has exposed the Philippines and the risk of dismembering the national territory because of the MOA.

At least two magistrates pointed out that by initialing the MOA, the government had bound itself to sign and honor it once the restraining order (TRO) that the high court issued against it was lifted.

Devanadera said the high court should dismiss the petitions against the MOA, arguing that there was no more case to decide as the agreement would “not be signed in its present form or in any other form” and that it had been “set aside.”

She initially told the high court that the government peace panel had no authority to sign the MOA so that their initialing it would have no binding effect. But she later modified that statement, explaining that what she meant was that the panel had no authority to sign a final peace agreement.

Devanadera argued that the government would not have been bound by the MOA as the document only contained consensus points for consultation, and these points would have had to go through constitutional processes.

She said that all the MOA did was to list down these consensus points, or the topics that would be subjected to further negotiations.

Devanadera said that the fact that President Gloria Macapagal-Arroyo had not yet seen the MOA in its final form showed that the agreement was truly a mere “codification of points of consensus” and “a process in continuum” that the President has yet to approve.

Binding on gov’t

Supreme Court Justice Adolf Azcuna said that in international law, a declaration of consensus points would be binding on the government. Even a unilateral statement by representatives of a state before an international forum is a binding obligation, and the state could not renege on its obligation by claiming that the agreement was unconstitutional, he said.

“From a legal standpoint, you have the MOA initialed by the panel and if you withdraw the TRO, that initial means that under international law, they are compelled to sign it,” he said.

He explained that if the MOA had been signed, the state would have been required to change the country’s internal laws in order to comply with it.

Malaysia, as the broker of the peace agreement, could even sue the Philippines before the international courts to compel it to implement the MOA, he added.

Azcuna said that the Supreme Court had to stop the signing of the MOA on the eve of the scheduled signing in Kuala Lumpur last Aug. 5 “because if it had been signed, it would have been a binding international obligation. Malaysia can compel us to change our Constitution.”

Since then, MILF forces have attacked towns, looting and burning homes and sending 220,000 people fleeing. The military, which is now engaged in operations against the forces of the so-called rogue MILF commanders, estimates that about 200 people have died in the three-week conflict so far.

The high court is hearing petitions from Sen. Manuel Roxas II and several local officials from Mindanao to have the MOA canceled, arguing that in proposing to create a Bangsamoro homeland to be governed by a Bangsamoro Juridical Entity (BJE), the MOA was carving out a separate state for the so-called Bangsamoro people and giving it an identity separate from that of the Philippines.

Chief Justice Reynato Puno ended the oral arguments at 6.30 p.m. yesterday, asking both parties and intervenors to submit their memorandums and position papers in 20 days.

Devanadera was also asked to submit Executive Secretary Eduardo Ermita’s written authorization that the MOA would not be signed in its present or future form, the travel authority to Malaysia of the members of the government peace panel and the final draft of the MOA.

Dismemberment

During the lengthy questioning of Devanadera, Justice Antonio Carpio said the Philippines could indeed be brought before the international courts for failing to honor the MOA, and the country could be forced to change the Constitution regardless of whether Congress or the people agree.

“You see the danger that could have happened had that MOA been signed? … You are risking dismemberment of the country on your conjecture that that’s not an international obligation,” Carpio told Devanadera.

Not international agreement

Carpio then asked what the government would do if the international courts order the country to comply with the MOA.

Devanadera replied that the Executive would cross the bridge when it gets there.

She said that even though the signing of the agreement would be held outside the Philippines, the agreement was for a domestic purpose and the venue did not “convert an internal document to an international document.”

Sedfrey Candelaria, legal consultant of the peace panel, also said the panel never acceded that the MOA was an international agreement.

He said that if the Philippines were to be dragged before the International Court of Justice, the court could not compel it to do anything if it refuses to submit to the court’s jurisdiction.

But on questioning from Carpio, Candelaria agreed that implementing the MOA would require an overhaul of the Constitution.

Carpio said that among the provisions that would be changed to accommodate the MOA were the provisions on territory and the provision for the country to have a single, national police force.

No authority to sign

Devanadera told the court that the panel had no authority to sign the MOA and that it was authorized only to negotiate for the particular document. She added that it had no authority to enter into an international agreement.

Carpio asked if the MOA was then just a piece of paper and would have no legal effect internationally and domestically, why did the panel invite the Organization of Islamic Conference and foreign officials, including United States Ambassador Kristie Kenney, to witness the event.

“You mean to say you asked them to witness an event that has no legal significance?” he asked.

The Solicitor General responded that the panel considered the event significant because the panel and the MILF had agreed on points to discuss, and there was confidence generated by the agreement to sit down and talk.

Candelaria also said that the presence of foreign diplomats in the aborted MOA signing was a mere indication that the international community was interested in peace.

Later in the afternoon, during questioning by Justice Eduardo Nachura, Devanadera said the panel had the authority to sign the MOA. What it could not sign was a final peace agreement, she said.

MOA set aside

Puno seized on Devanadera’s statement that the MOA would not now be signed “in any other form” noting that this was a “significant” change from the Executive’s earlier stand that the agreement would not be signed “in its present form.”

“Why are there many versions of the actions of the President? Why is its language changing?” Puno asked.

He asked what the difference was between the MOA not being signed in its present form and not being signed in any other form.

Devanadera explained that when the Executive said that the agreement would not be signed in its present form, it was observed that it could be signed in another form after the hearings were terminated. To make clear the Executive’s stand, the official stand was made that the MOA would not be signed, she said.

“No matter what the SC decides, the government will not sign MOA,” she added.

Puno asked if it can be said that the MOA has been set aside.

“Since it won’t be signed, it has been set aside, but not the peace process,” Devanadera replied.
Deviation from traditional mode

The Chief Justice also inquired what model the MOA was derived from and who recommended it. He pointed out that the traditional model, which the government used in dealing with the Moro National Liberation Front, was first amending or including constitutional provisions on the law governing the Autonomous Region in Muslim Mindanao and then having Congress enact the necessary implementing laws.

He said that with the MOA, the government had deviated from the traditional mode and this was the reason why the agreement became controversial.

“This MOA is hardly recognizable international law and standards. We can’t even reach a proper characterization,” Puno said.

Devanadera said that in her “very personal opinion,” and being a conservative, she would have opted for the traditional model although she said she does not discount that other modes were worthy of being looked into.

First Nation

The other justices focused on the possible scenarios that might arise from the interpretation of the provisions of the MOA.

Justice Leonardo Quisumbing pointed out that other parties consider the MOA a done deal and are poised to take over the territories mentioned in the agreement.

Justice Dante Tinga inquired whether the “Bangsamoro” should be regarded as an indigenous people on the basis of their religion, and if the government panel considered scientific, historical and legal bases for recognizing the Muslims of Mindanao as an indigenous people or community.

Devanadera admitted that the Bangsamoro were not recognized as an indigenous people under the Indigenous Peoples Rights Act but that this recognition was granted in the organic acts passed by Congress for the Autonomous Region in Muslim Mindanao.

Carpio hinted at the impropriety of the use of the term “First Nation”—a term used to refer to the aboriginal peoples of Australia, New Zealand and Canada— in the MOA to describe the Bangsamoro.

He said this would mean there was a “subsequent nation” which in the case of the three former British colonies was the white settlers. However, in the Philippines, it is considered that all Filipinos are members of the Malay race, he said.

Devanadera said the term was used in a “very loose sense.”

Tinga also observed that the MOA seemed to have made the MILF as “possessing some sort of limited international personality” similar to that of the Palestinian Liberal Organization when it signed a peace agreement with the Israeli government.

Devanadera stressed that was never the intent of the government. She said that the personality of the MILF as a rebel group, as regarded by the government, did not change in all the stages of the peace process.

If the goals of the final agreement are fulfilled, the MILF would be reintegrated into the mainstream Philippine society and would even be considered part of the national government, but never a nonstate entity or a state-in-the-making under international law, she said.

Justice Minita Chico Nazario asked Devadanera what her personal opinion was on how the government should have proceeded with the negotiations for the MOA.

Devanadera said that when she was mayor of Sampaloc town in Quezon province and had to deal with communist rebels, she organized local peace talks which required that the rebels lay down their arms, have them sit down in good faith and not cry for the moon and the stars, and make them contemplate eventual reintegration with society.

THE Cebu City government confirmed plans to sell the Cebu City Medical Center (CCMC) to reduce its costs of running the hospital and facilitate the entry of new management to improve its services.

Cebu City Mayor Tomas Osmeña confirmed in yesterday’s press conference that the University of San Carlos (USC) and the University of Cebu (UC) showed interest in buying the 47-year old CCMC.

Cebu City administrator Francisco Fernandez said they have started talking with USC which already started doing an inventory of the city hospital’s facilities and records as well as assessment of its existing staff.

Osmeña also said UC President Go expressed interest in buying the city hospital to provide a training ground for the school’s nurses and doctors.

He said that while he wants to sell the entire CCMC including its nursing wing, he is still open to other options.

This includes selling the hospital part by part or by department, Osmeña said.

He said the hospital will first be appraised for its market value and then bidded out to interested parties.

The mayor said one of the preconditions set for the buyers is for them to shoulder half of the benefits of the employees who will be forced to retire or be laid off.

He said the payment may reach P50 million.

Osmeña claimed that the CCMC personnel posed the biggest problem in running the hospital since they resisted any reforms the Cebu City government introduced in improving their operations and management.

“They are the problem. It is very hard to do reform in CCMC with the culture of thinking only of themselves,” Osmeña said.

He said he already warned the CCMC to secure International Standardization Organization (ISO) accreditation back in 2001.

But the city hospital failed to do so even if the Cebu City government moved to hire a foreign consultant.

Osmeña said there may have been improvements in the operations but these were insufficient.

If the CCMC is sold, the mayor said he will allocate the P160 million annual budget to secure PhilHealth cards for urban poor families.

Osmeña said a small office may also be set up to approve vouchers for beneficiaries who will be issued PhilHealth cards.

The budget can also be used to improve health centers and set up pharmacies that sell cheaper medicines to the poor.

“We want to do it, we will look for another system where our constituents will enjoy better services,” Osmeña added.

The mayor said they would rather give more scholarships rather than run a nursing school in the CCMC.

“Once the nurses graduate they will no longer live here. What are we doing? How does this translate to making our city better?,” Osmeña noted.

The Cebu City mayor said he would rather give scholarships to poor but deserving students from the hinterland barangays.

Osmeña said even if they go abroad they will still remit their earnings to their relatives in Cebu City’s hinterland barangays.